COLUMN: Bush’s stimulus bills are taxing

Steve Skutnik

A “misguided, poorly timed” measure that would have the effect of “crippling the federal government’s ability to meet vital needs in education, veterans’ care, transportation and homeland security” crows the New York Times. A proposal that will “widen the gap between rich and poor” and “will threaten the country’s long-term well-being” screams the Washington Post. What is the culprit exactly — a new regressive tax? Draconian spending cuts? Yet another war?

No, just the latest round of tax cuts passed by the House and Senate, which according to the self-appointed experts will certainly doom our nation to the fate of Rome.

Are tax cuts in principle such an awful thing? Outside of the rhetoric of some elite liberal policy circles, the answer is no. Returning money that rightfully belongs to Americans before its confiscation by the federal government is certainly not a crime, despite what some may say. Yet it is the manner in which Mr. Bush has gone about it which seems to make his proposal such an easy target of scorn and ridicule — even from budget hawks on the right.

One of the first problems Mr. Bush has faced in his tax cut rhetoric is the inherently gimmick-laden nature in which they have been presented. Using accounting measures that would put Enron to shame, he has put forth a mishmash of tax cuts which appear and disappear in a manner more choreographed than pro-wrestling, all for the sake of putting a price tag on the package that makes it easier to swallow by the more fiscally squeamish. Yet somehow, through this bureaucratic maze one is supposed to expect “stimulus.” How exactly is any business or individual going to exploit said stimulus when it takes an army of accountants simply to figure out which “stimulus” comes into play each year — and which ones disappear?

Meanwhile, a yawning budget deficit hardly serves to bolster investor confidence — despite what some supply-side economists may claim, the time comes one day to pay the piper. Deficits racked up now due to the fiscal incontinence of the President and his men ultimately serve to gobble up private capital for investment in the future — meaning a slower economy and fewer jobs.

Indeed, this “stimulus” argument has been the principal gimmick in Mr. Bush’s arsenal, whether the economy is doing well or in a slump. Yet rather than relying on tenuous supply-side arguments for tax reform, Bush has a much more powerful yet largely untapped weapon in his arsenal — the argument that the money never belonged to the federal government to begin with. Unlike what some progressives may claim, citizens do not live and work for the sake of government — their income no more “belongs” to the government than their firstborn.

However, it is easy to see why Bush doesn’t rely on such an ethical plea — namely, as far as the matter of spending the loot goes, Mr. Bush is in no position to talk. Despite what many conservatives have to say about “Slick Willy” Clinton, Mr. Bush has proven even in his outset to be a more lavish patron of government than Mr. Clinton ever was. Despite Republicans controlling both the White House and Congress, Americans have yet to see any meaningful reductions in the size and scope of government. Rather, instead we’ve seen the creation of whole new omni-departments, demands for sweeping new federal powers, and promises for more federal entitlements that would seem to make prior boondoggles like HillaryCare pale in comparison.

What does it say about Republicans when even at the apex of their control, they still show no backbone toward spending cuts?

Should Mr. Bush ever truly turn his eyes towards tax reform yet his restraint for spending prove weak, there nonetheless exists a solution: economists at the Cato Institute have calculated that even at the current levels of federal spending, a national sales tax with reasonable exemptions for necessary goods like food and clothing could replace the entire labyrinthine system of income taxes with a set rate of fifteen percent — all without cutting a single item from the current budget. Compare this to the average of upwards of twenty to thirty percent in income taxes Americans now pay on their income, before they even have the chance to see a cent of it.

Yet such a proposal could go much further in liberating Americans from tax slavery if Mr. Bush would simply rally the courage to act on his avowed conservative principles and start slashing federal spending. Such a move of fiscal prudence would serve him well in his seeming holy war for tax cuts — by dropping out the floor from critics who argue Mr. Bush’s tax policy opens up gaping holes in the budget, he would serve to expose the remainder of the rhetoric against tax cuts for what it is — bald-faced, class-warfare politics.